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Questions And Answers - Tuesday, 27 March 2007

Questions And Answers - Tuesday, 27 March 2007

Questions to Ministers

Health, Minister—Confidence

1. JOHN KEY (Leader of the Opposition) to the Prime Minister: Does she have confidence in the Minister of Health?

Rt Hon HELEN CLARK (Prime Minister): Yes.

John Key: Who is to be held to account for the bungling of a half-billion-dollar contract and putting essential health services at risk for 1.5 million New Zealanders—the boards that awarded the contract, despite an obvious conflict of interest; the Minister who appointed the leadership of those boards; or, as has always been the case previously under her Government, nobody?

Rt Hon HELEN CLARK: The board is clearly responsible. I also point out that there was a clear conflict of interest. Notwithstanding that, Dr Paul Hutchison, National MP, asked the board to consider contracting him.

John Key: If the Prime Minister thinks that the boards are responsible, can she confirm whether she has confidence in the chairs and the various deputy chairs of the Auckland regional district health boards?

Rt Hon HELEN CLARK: I have declined to express that confidence until I see the outcome of this matter.

Hon Annette King: Did the Prime Minister hear the comments made by Dr Tony Bierre on Radio New Zealand this morning when he claimed that he had always disclosed his conflict of interest, even before he was elected to the Auckland District Health Board in October 2004, and has she seen any evidence that Dr Bierre told the voters of Auckland that he intended to pursue a contract for his company if he was elected?

Rt Hon HELEN CLARK: Absolutely not. I believe that Dr Bierre’s behaviour was quite duplicitous. I note that his Citizens and Ratepayers colleague, Dr Blue, has described him as a very charming and intelligent individual and that a National MP actually advocated for him to get a contract from the board.

Judy Turner: Is it not true that knowledge of Dr Bierre’s conflict of interest was in the public arena long before the contract was awarded, and who does she hold accountable for the amount of time that went by with no effort made to address this?

Rt Hon HELEN CLARK: Indeed, it is true that the member of the board Dr Bierre was asked to stand down in December 2005. I am told that when he was asked to stand down he said he would not do it until he took the advice of his good friend Dr Jackie Blue. He did stand down, it was in the public arena, and the board carried on.

Sue Kedgley: Does the Prime Minister have concerns that if the Auckland district health boards allow Labtests to re-tender for the Auckland laboratory contract, the message to public servants will be: “Conceal your conflict of interest, use your public position for private gain, and your company will not suffer.”?

Rt Hon HELEN CLARK: This contract was struck down by a court. That shows how serious the conflict of interest was. It was not serious enough to stop a National MP asking the board chair if he would give a contract to Dr Bierre, but it was serious enough for a court to strike it down.

John Key: If the Prime Minister’s statement is that Dr Bierre’s conflict of interest was “very obvious”, why does she still have confidence in her Minister and in the members of the various Auckland district health boards when the facts of life were that it was blatantly obvious to everyone before the contract was even signed?

Rt Hon HELEN CLARK: If the member had listened to my earlier answer he would have heard me expressly decline to express confidence.

Hon Pete Hodgson: Is the Prime Minister aware that the letter that was written by Dr Bierre to Dr Hutchison on Friday, 24 June 2005 concludes with the sentence: “Your suggestion of a letter to Wayne Brown would be greatly appreciated.”, and does that throw any new light on the role of Dr Hutchison?

Rt Hon HELEN CLARK: We know that letter was written, and we know that as a result of receiving that letter Dr Hutchison wrote to Mr Wayne Brown and said: “Please consider giving my friend a contract.”

Sue Kedgley: How can the Prime Minister have confidence that the new lab tendering process will be fair, given the district health board’s record in turning a blind eye to an absolutely blatant conflict of interest?

Rt Hon HELEN CLARK: The first matter to be addressed is to get services clearly contracted from 1 July, before the board looks at the longer-term issues.

Sue Kedgley: I raise a point of order, Madam Speaker. I asked the Prime Minister how she could have confidence that the new lab tendering process would be fair. I wonder whether she could address that question, given the blatant conflict of interest of the district health board.

Rt Hon HELEN CLARK: There are two issues here: the first is to secure services from 1 July; the second is for the board to take a longer-term look at how it deals with contracting for these services. Clearly, the process would have to be a lot better than that supported by National Party MPs in the past.

John Key: Does the Prime Minister agree with Mr Brown’s assessment of his own performance last week that he had “done nothing wrong” and that he was “exceptionally successful”; if not, why not?

Rt Hon HELEN CLARK: Wayne Brown—who was first appointed to many positions by a National Government—has been a successful chair of many bodies. The matter now is to look at why the board proceeded to offer this contract, knowing what it did about the conflict of interest.

Hon Pete Hodgson: How does she explain Dr Bierre’s press statement made last Thursday evening: “At no time did I mislead the board …”, with the finding in paragraph 330 from the judge that: “Dr Bierre’s actions breached two statutes.”?

Rt Hon HELEN CLARK: I personally find the court’s finding compelling. I do not think there can be any defence of Dr Bierre’s actions. The only people who have defended them are two National Party MPs.

John Key: Does the Prime Minister recognise that the country is rapidly starting to see her as a commentator who is surprised and shocked at every issue that goes on, but unlike a Prime Minister she does not take responsibility for anything whether it is Auckland health, the National Certificate of Educational Achievement, or the Department of Corrections?

Rt Hon HELEN CLARK: I get concerned when someone described as a very charming and intelligent friend of a National Party member gets awarded a contract like this. That is why the matter needs to be looked at.

Peter Brown: Is the Prime Minister in a position to give the House an assurance that no matter what the final contractual arrangements for lab tests in Auckland become, the dedicated staff who currently work at Diagnostic Medlab will be treated with the respect they deserve and not told by anybody, privately or publicly, that if they do not like the arrangements they can go drive a taxi, and if she can give that assurance how is she going to achieve that with the current bully-boy chairman in charge of the Auckland District Health Board?

Rt Hon HELEN CLARK: What anyone would conclude from looking at that court judgment is that those who come forward to tender for contracts for services must be on a level playing field. End of story!

Hon Annette King: Has she seen the judge’s comments that Dr Bierre had “limited concern about conflict of interest that he demonstrated throughout”, and does she agree with the judge that Dr Bierre was asked to stand down rather than doing so voluntarily, as he continues to claim?

Rt Hon HELEN CLARK: Absolutely, and he was asked to stand down. Of course, he needed advice from Dr Jackie Blue before he did that, but eventually he went.

John Key: When did the Prime Minister first learn that there could be a potential conflict of interest in respect of Dr Bierre, and what did she do about it—did she ask the Minister, did she ask any one on the board, or did she just come back from overseas and decide to wing it again with another commentary piece?

Rt Hon HELEN CLARK: I think that “winging it” would be a good description of the member’s own behaviour last week, quite frankly.

John Key: I raise a point of order, Madam Speaker. I asked the Prime Minister a very serious question about when she found out. It was quite clear in the newspapers for months beforehand that there was a potential conflict of interest. There were many, many articles written on the issue. The Prime Minister must have known prior to that. If she is a dutiful, responsible Prime Minister, I am sure she will have asked her Minister to investigate. Maybe she can tell the House when she first had concerns.

Rt Hon HELEN CLARK: I can say that this dutiful and conscientious Prime Minister did read what was in the newspapers and did raise the matter with the Minister of Health. The Minister of Health reported back on the advice of the ministry, which has been the same all along—that it did not see a problem. I think we need to look at the quality of that advice.

John Key: If the Prime Minister did ask the Minister of Health and the Minister of Health said there were no issues, why was it totally obvious when she came back from overseas?

Rt Hon HELEN CLARK: The development from the time I went away was a court judgment that struck down a contract of a National Party friend.

Dr Paul Hutchison: I seek leave—again—to table part of the ruling made by Justice Raynor Asher where he described a warning from me to Wayne Brown regarding a conflict of interest, as careful and clear.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Hon Annette King: I seek leave to table the full letter from Dr Hutchison. He continues to exclude the part that does not suit him, which shows that he was promoting his friend Dr Bierre.

Leave granted.

John Key: Is the Prime Minister convinced, then, that the Minister of Health did a good enough job of actually looking into the conflict of interest, given that he must have known it was a very significant issue because a judicial review had been lodged, and did not some bells go off in the Prime Minister’s head that when a judicial review has been launched there may be a conflict of interest and therefore an issue to look into?

Rt Hon HELEN CLARK: Yes, of course, but the advice the Minister received was that it was not an issue. I might say that when a National Party member of Parliament writes letters, thinking it is not an issue, one is surprised that the Leader of the Opposition is now carrying on like this.

John Key: Why is the Minister of Health—[Interruption] Actually, I am not the one in the gun; that member is. [Interruption] Oh yes, the member is.

Madam SPEAKER: Would members please settle. Could the member ask his question, and then we will receive the reply.

John Key: Why is the Minister—[Interruption] That member could not even organise a decent stadium—

Madam SPEAKER: Please be seated. We will hear the question in silence and we will hear the answer in silence. If anyone interrupts, that member will leave the Chamber.

John Key: If the Minister of Health gives such shonky advice to the Prime Minister or does not bother digging deep enough when a judicial review is ordered, and then the Prime Minister comes back and relies only on the judgment and does not do some investigative work beforehand, is she now surprised the people of New Zealand think that her Government is responsible, even if she does not?

Rt Hon HELEN CLARK: What the member will never get a chance to learn is that Ministers operate on advice. The advice was that there was not an issue—[Interruption]

Madam SPEAKER: I say to those members who interrupted that the question was heard in silence, and I wish them to leave the Chamber. I said that the question was to be heard in silence, as is the answer. Please leave the Chamber.

Hon Bill English withdrew from the Chamber.

Dr the Hon Lockwood Smith withdrew from the Chamber.

Simon Power withdrew from the Chamber.Madam SPEAKER: Mr Key, you can stay until we hear the answer as you asked the question.

Rt Hon HELEN CLARK: I gave an answer. It is a little impossible to remember, in the turmoil that followed, what the question was and what then followed.

Gerry Brownlee: I raise a point of order, Madam Speaker. Throughout the exchange covering that question there was a lot of banter from both sides of the House. Very, very provocative statements were made by the Minister Trevor Mallard, which did bring some rebuke from you, but not a mention of his name, nor an expulsion from the House. You made a request, and a large number of National Party members accepted that they were outside your ruling and left the Chamber, but I note that a number of those members have questions on the Order Paper today. It would be unfortunate, I think, if the Government’s behaviour incited a response that in return meant the Government could not be questioned because those members were subsequently expelled from the House. I ask you perhaps to consider whether those members might be able to return to the House to ask the questions they have lodged on the Order Paper.

Hon Dr Michael Cullen: Although that practice has developed over recent times, it has been a relatively recent one and I do note that even as recently as last Thursday a Minister who was about to answer a question was required to leave the House, which required another Minister, who was relatively new to the topic, to stand and answer on his behalf. I think, at the end of the day, if that rule is applied in the way the member requests, there is not much point in your issuing those kinds of warnings, if what it says is that anybody who interjects now, except for those who might have a question on the Order Paper, will be required to leave the Chamber.

Ron Mark: In the interests of consistency and fairness, Madam Speaker, I point out also that last week, when you asked a number of members who had interjected after your warning to identify themselves and leave the Chamber, a number of honourable members did so, and I was one of those members. I also had a supplementary question that I wanted to ask and was unable to ask, and that was my own fault. I also note that, despite your request, during that question there was a large amount of noise from behind me in the cross benches of National’s caucus, yet not one person from that area stood up and left the Chamber. If I had been watching, I would be able to tell you the names. All I know is that there was a lot of noise, you asked those people to leave, and no one left from that quarter. I ask you to consider that in ruling on Mr Brownlee’s request.

Madam SPEAKER: I thank members for their comments. There had been a vigorous exchange across the House from all parties. It was when that started to get out of hand, to the level of creating disorder, that I took the somewhat unusual step of asking for both the questioner and the Minister answering to be heard in silence. When the question was asked it was heard in silence, but the answer, almost immediately it started, was not. That was a flagrant breach of the ruling I had given, in the circumstances. So I am sorry, but in the interests of consistency, somehow or other we have to maintain order in this House.

Savings—Economic Impact

2. CHARLES CHAUVEL (Labour) to the Minister of Finance: What recent reports, if any, has he received on the economic impact of increasing savings in New Zealand?

Hon Dr MICHAEL CULLEN (Minister of Finance): I continue to receive a large number of such reports. These include reports from the Reserve Bank, from a US funds manager, Bill Buechler, and from a former Australian Prime Minister, Paul Keating, all of which have stressed the importance of increasing savings. Also, a substantial report from Treasury late last week makes the point that homeownership is not enough, and that New Zealanders also need to increase other forms of savings.

Charles Chauvel: What is the Government doing to encourage New Zealanders to save more?

Hon Dr MICHAEL CULLEN: From 1 July this year this Government’s KiwiSaver plan will make it easier for New Zealanders to save for their retirement. It is a scheme that has been widely praised both in New Zealand and overseas, and I appreciate the widespread support from the House for this proposal. It is a pity that that support did not include that of the National Party, whose only aim was to cut taxes for the most well-off, rather than to increase the savings of those on moderate incomes.

R Doug Woolerton: Did the Minister note in that report from a former Australian Prime Minister, Paul Keating, that policies to force people to save are unpopular, that poll-driven donkeys get nothing done, and that showing leadership in a bigger-picture view is what is required to deal with our looming superannuation crisis?

Hon Dr MICHAEL CULLEN: Yes. Mr Keating said that leaders get things done and that poll-reading donkeys get nothing done. I think that is a very reasonable comment to make in these circumstances. Australia, of course, went down the compulsory contribution route as a result of a trade-off in the early 1980s around inflation. My own view remains that compulsion for employees does not need to be a part of KiwiSaver in the future.

Corrections, Minister and Department—Confidence of Prime Minister

3. GERRY BROWNLEE (National—Ilam) on behalf of JOHN KEY (Leader of the Opposition) to the Prime Minister: Does she have confidence in the Minister of Corrections and his department; if so, why?

Rt Hon HELEN CLARK (Prime Minister): As I have told the member who set down the question twice already this month, yes; because the Minister is hard-working and conscientious. Although the department clearly has room to improve, I am confident that, with its current leadership, that will happen.

Gerry Brownlee: How does the Prime Minister reconcile her previous statements and those of her Minister that there is no widespread corruption within our prisons with the public admission of the Chief Executive of the Department of Corrections, Barry Matthews, that there is a “culture of corruption” in his department?

Rt Hon HELEN CLARK: That in itself does not say how widespread it is. It says that Mr Matthews has problems with some individuals.

Gerry Brownlee: How does the Prime Minister reconcile the previous statements made by both her and her Minister that corruption and dysfunction are not widespread in our prisons with the decision to stand down the Wellington regional manager of prisons, a senior Department of Corrections official?

Rt Hon HELEN CLARK: Easily, by looking at the way that this matter has been reported. It is clear Mr Matthews said that that man was “not under suspicion of corruption”.

Ron Mark: Would it not be fair to say that the mere fact that the Department of Corrections has put together an anti-corruption team, that it has suspended 11 employees thus far at Rimutaka Prison, and that investigations are ongoing into issues that do not involve just corruption but might well involve employment matters such as competence, not tend to give some weight to the thought that confidence in the department can rightly begin to rise because actions are in hand and business is being taken care of, and maybe she has some announcements to make further on, over the next few weeks, that might again raise confidence in the department?

Rt Hon HELEN CLARK: I see the actions that the head of the Department of Corrections is taking to clean up the problems that are evident as very encouraging, and I am sure that amendments such as those to the Parole Act that the Government is bringing to the House will improve the situation further. Overall, we need to make sure that the different parts of the criminal justice system are working well together. On the evidence, there has not been the good interaction that there should have been between some elements of it.

Gerry Brownlee: Why is the Prime Minister confident in saying that corruption in the prison service is not widespread, when the chief executive of the prison service, Barry Matthews, uses the very expansive statement that a “culture of corruption” is rife within his department?

Rt Hon HELEN CLARK: As I said in reply to the member’s first supplementary question, that is not in itself a statement that it is widespread.

Gerry Brownlee: If the Prime Minister has so much confidence in Damien O’Connor and the Department of Corrections, why did she hastily announce just before leaving the country a review into the entire justice system, including the Department of Corrections, because she is “concerned about the overall operation of the system”, then fail to tell anyone the terms of reference, the time frame for the review, and even who would actually be conducting it?

Rt Hon HELEN CLARK: The member will just have to wait.

Driver Licensing—Limited Licences

4. RON MARK (NZ First) to the Minister for Courts: Of the people who applied for a limited licence in each of the past 3 years after being disqualified from driving or having had their licence suspended, how many had their applications granted and how many were dismissed, struck out, or refused?

Hon CHRIS CARTER (Acting Minister for Courts): Applications granted, including applications by consent, were 3,668 in 2004, 3,403 in 2005, and 2,964 in 2006; dismissed were 12 in 2004, 16 in 2005, and 17 in 2006; struck out were two in 2004, two in 2005, and none in 2006; and refused applications were 17 in 2004, 15 in 2005, and 19 in 2006. The decision to grant a limited licence is made, of course, by a District Court judge who is required to make such decisions.

Ron Mark: Does he think that allowing people convicted of dangerous driving, multiple speeding offences, and drunken driving to virtually buy their licences back after losing them is proving an effective deterrent to dangerous driving; if so, why does he think that?

Hon CHRIS CARTER: I remind the member in the House again that decisions on whether a limited licence can be granted is, of course, made by a judge under our judicial system.

Ron Mark: Does he think the limited licence application process is working as intended, given that there are online forums around entitled “How to get a limited licence for under $400”, companies that specialise in the “get your licence back” business, advertising now on radio, and that 99 out of 100 applications are approved—in effect, rubber-stamped?

Hon CHRIS CARTER: There is a clear judicial process for judges to follow to consider whether a limited licence can be granted. These reasons include extreme hardship to the applicant, undue hardship to a person other than the applicant, and “an order under this section is not contrary to the interests of public safety”. Those are fairly clear guidelines.

Ron Mark: I seek the leave of the House to table an online forum from entitled “How to get a limited licence for under $400”.

Leave granted.

Ron Mark: I seek leave to table a home page from a legal site that states that despite requiring extreme hardship to be eligible “we usually manage to find hardship for our clients that can be characterised as extreme”.

Leave granted.

Laboratory Services—Auckland District Health Boards

5. Hon TONY RYALL (National—Bay of Plenty) to the Minister of Health: How were the Auckland district health boards hoodwinked by Dr Bierre, as stated in answers on his behalf in the House last week?

Hon PETE HODGSON (Minister of Health): In Justice Asher’s judgment there are many, many references to Dr Bierre’s behaviour. For example, in paragraph 230, the judge says: “Dr Bierre should have declared the conflict of interest arising out of his ADHB membership and his desire to bid for ADHB funding for his own laboratory at the outset of his ADHB membership and certainly from the end of December 2004 … The necessity to disclose became even stronger when he applied for ADHB funding in March 2005, and stronger again in November 2005 ...”. By the time the judge reached paragraph 330 he had concluded that Dr Bierre had breached two statutes. The faults certainly do not lie with Dr Bierre alone, but had Dr Bierre behaved as one might have hoped there would not have been a conflict of interest.

Hon Tony Ryall: If the district health boards were hoodwinked and misled, why would they give Dr Bierre the contract even after they found out they were hoodwinked and misled?

Hon PETE HODGSON: I think the words of the judge were that the serious process error was made by the district health boards.

Hon Tony Ryall: Is one of the parts of the judgment the Minister accepts absolutely the judge’s ruling that on becoming aware that Dr Bierre might be involved in a bid in December 2005, the district health boards should have refused to entertain any bid involving him, given Dr Bierre’s involvement in the district health boards’ strategy and matters relating to the whole process; if so, why did the Minister’s appointees, Wayne Brown, Kay McKelvie, and Pat Snedden, sign the contract knowing of what the Prime Minister has now described as a duplicitous conflict of interest?

Hon PETE HODGSON: Yes; and part of the reason I suspect they did is that they had from the Audit Office a written opinion to say that all was well, and from their own lawyers a written opinion to say that all was more than well.

Maryan Street: Whose responsibility is it to manage conflicts of interest on district health boards?

Hon PETE HODGSON: In law, the answer is that it is the responsibility of the boards and the membership comprising the boards. The new National Party members on the Auckland District Health Board in December 2004 were given a presentation on conflicts of interest soon after the election, along with other board members. The presentation was prepared by Richard Westlake, a very experienced member of many boards. Dr Bierre and Jackie Blue could not have been in any doubt of their obligations.

Barbara Stewart: Does he consider that making a scapegoat of Dr Bierre, who was only taking advantage of a golden opportunity to feather his own nest, is an adequate response to the lab-test debacle; if not, what steps is he taking to ensure that such a fiasco cannot reoccur?

Hon PETE HODGSON: The member asks a very good question, and the answer is that he is certainly not the only person who has made errors. He did, however, manage to breach two statutes. The issue of whether it happens again is the one that is prime in my mind, but before I address it, I will be addressing another issue, which is to ensure that a contract is in place for the people of Auckland for reliable, quality community laboratory services from 1 July this year.

Hon Tony Ryall: If, as the Prime Minister says, Dr Bierre may be guilty of criminal behaviour, and given her questioning why the board persevered with the contract in the face of conflicts of interest, should the district health boards involve themselves in any future contracts for laboratory services involving Dr Bierre, in light of the Prime Minister’s description of him today as “duplicitous”?

Hon PETE HODGSON: One of the important findings of the judge was that the very process of the court case rendered equal the playing field for all players, which had been unequal prior to that.

Hon Tony Ryall: Is the Minister saying in the House today that it is OK to award a contract to someone who has used inside information and whom the Prime Minister says may have been involved in illegal activity; and is that the new form of accountability in public life that this Government promised?

Hon PETE HODGSON: I am making a related point, which is that the judge, in his judgment, found that the very process of disclosure in the court case meant that any advantage that anyone had is now gone.

Working for Families Programme—Tax Credits 1 April 2007

6. RUSSELL FAIRBROTHER (Labour) to the Minister for Social Development and Employment: By how much are Working for Families tax credits increasing on 1 April 2007?

Hon DAVID BENSON-POPE (Minister for Social Development and Employment): I am pleased to advise the House that the Working for Families tax credits will increase by $10 per week per child on 1 April. For a Kaitāia family like Josephine and William and their four children between the ages of 12 and 3 years, who are currently receiving $263 per week in family tax credits, it means they will be another $40 a week better off, receiving in total $303 in targeted tax relief. Under National’s policy—which the electorate rejected, of course, at the last election—the same family would not have been $303 better off; it would have been $293 worse off.

Russell Fairbrother: How many families are receiving this increase in Working for Families tax credits?

Hon DAVID BENSON-POPE: A total of 360,000 families will be entitled to Working for Families tax credits—that is, three out of every four families with children will be receiving tax relief—amounting to $1.6 billion annually. The latest $10 per child per week increase applies to all eligible families, whether they are in work or reliant on a benefit.

Russell Fairbrother: What will be the effect on household income of this increase in Working for Families tax credits?

Hon DAVID BENSON-POPE: The latest increase is expected to move an additional 70,000 children out of poverty. With the full implementation of the Working for Families package on 1 April, New Zealand will move from its current ranking of 18th out of 24 countries in terms of the number of households in poverty, into the top half of OECD countries. It will most likely move into the top five, alongside Denmark, Norway, Finland, and Sweden.

Te Ururoa Flavell: Kia ora, Madam Speaker; kia ora tātou. What is the rationale for denying New Zealanders who require income support, but who are not in employment, the opportunity to be supported in meeting their financial responsibilities as families?

Hon DAVID BENSON-POPE: Working for Families has already made beneficiaries better off by around $31 a week, and from 1 April 2007 family tax credit rates will increase—as I have just said—by a further $10 per week per child. This significant investment in the well-being of all New Zealanders will, clearly, ensure that families with children that earn less than $35,000 a year effectively pay no tax, at all.

Economic Growth—Productivity

7. Hon DAVID CARTER (National)on behalf of the Hon BILL ENGLISH (Deputy Leader—National) to the Minister of Finance: Does he stand by his statement of 3 November 2005 that “Growth in productivity is the major factor in setting New Zealand securely on a path of sustained economic growth.”?

Hon Dr MICHAEL CULLEN (Minister of Finance): Yes, and I stand by the rest of my statement that “it requires investment by firms in plant and equipment, and investment by government (and private sector partners) in infrastructure. But the major investment it requires is in the skills of the workforce.”

Hon David Carter: Has the Minister seen the most recent figures published by Statistics New Zealand, which show that productivity growth for the last 12 months is the lowest on record; and what is the Minister’s response to that record?

Hon Dr MICHAEL CULLEN: The figure the member cites is labour productivity, not total factor productivity. Of course, in a period when the economy slowed down but employment remained extremely strong—unemployment remained well below 4 percent—that is the natural outcome. Treasury is forecasting labour productivity growth to average in excess of 2 percent per annum over the next 3 years.

Hon David Carter: Has the Minister also seen a recent publication from the Bank of New Zealand headed “Living In a Fool’s Paradise”, which describes the latest productivity figures as “abysmal”; and is he aware that this report notes that productivity growth has declined every year since 2001 whilst he has been the Minister of Finance?

Hon Dr MICHAEL CULLEN: What has, in fact, been happening over that period is extremely strong labour force growth and employment growth. During the 1990s when the economy slowed down the cycle, there was large labour force shedding and unemployment rose. In 1999 Mr English said Labour’s plans to reduce unemployment to the kind of levels we are now seeing were a “hoax”.

Hon David Carter: Is it not a fact that he as Minister of Finance has presided over a period of economic buoyancy, but that the productivity figures prove that nothing has been locked in to the long-term benefit of the New Zealand economy?

Hon Dr MICHAEL CULLEN: I repeat to the member that Treasury is forecasting labour productivity growth to average in excess of 2.0 percent per annum over the next 3 years. There have been significant changes to the tax system in the last couple of years, and further changes in this year’s Budget will tend to underpin that productivity growth.

Jeanette Fitzsimons: When the Minister’s goal of sustained economic growth runs into conflict with the Prime Minister’s goal of becoming the first truly sustainable nation in the world and he has to choose between continuous growth and genuine sustainability, which will be the Government’s priority goal and why?

Hon Dr MICHAEL CULLEN: I think the member makes a false dichotomy. New Zealand, for example, has a very poor record in terms of output per unit of energy consumed. We are clearly capable of substantially increasing productivity growth, while at the same time addressing the sustainability issues that the Prime Minister has outlined. Indeed, in the longer term one suspects that, for New Zealand, increasing the level of economic growth will require attention to be paid to those sustainability issues—if for no other reason than international marketing considerations.

Craig Foss: I seek leave to table four documents. The first is a document from Statistics New Zealand from 16 March, entitled “Labour Productivity Growth Lowest on Record”.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Craig Foss: The second document, dated 19 March, is a report from the Bank of New Zealand entitled “Living in a Fool’s Paradise … Productivity slump highly inflationary”.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Craig Foss: I seek leave to table the third document, dated 22 March, again from the Bank of New Zealand, entitled “Productivity Slump Inflames Inflationary Concerns”.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Craig Foss: I seek leave to table the final document, which is a written question from myself to the Minister of Finance that asks: “Is there persistent core inflation in New Zealand as reported in the Reserve Bank of New Zealand December 2006 Monetary Policy Statement?”, to which the Hon Dr Michael Cullen answered: “Yes, but it remains consistent with the requirements of the Policy Targets Agreement ...”.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Corrections, Department—Confidence

8. GERRY BROWNLEE (National—Ilam) on behalf of SIMON POWER (National—Rangitikei) to the Minister of Corrections: Does he have confidence in his department; if so, why?

Hon DAMIEN O'CONNOR (Minister of Corrections): Yes, but there is always room for improvement.

Gerry Brownlee: Does the Minister stand by his statement in the House last week that it was “ridiculous” to claim that corruption at Rimutaka Prison went on with the knowledge of management; if so, how does he reconcile that with the suspension of Wellington’s regional prisons manager and Barry Matthews’ statement this morning that the concern that management was allowing these things to happen has gradually increased as the inquiry has gone on?

Hon DAMIEN O'CONNOR: I do stand by my statement, and I would like to repeat what the chief executive has said regarding the employment issue currently at Rimutaka Prison—that is, that that manager is not under any suspicion of corruption.

Gerry Brownlee: If we are to believe the Minister’s statement that it is ridiculous to believe that there is widespread corruption in our prisons, why has the Prime Minister in the House today relied so heavily on her own investigation into these matters to prove there is not widespread corruption in our prisons—despite the chief executive acknowledging exactly that?

Hon DAMIEN O'CONNOR: I do not believe that the chief executive has acknowledged that. In a staff of over 5,000 people, in a very difficult area, it is inevitable that there will be individuals who from time to time do not abide by the law or by the procedures we lay down. We will identify those people, stand them down, dismiss them, and prosecute them, wherever necessary.

Gerry Brownlee: Can the Minister confirm that last year the manager of Waikeria Prison was appointed to “address the culture” at Rimutaka Prison, because it had twice the number of incidents where force was used by guards on inmates as at similar facilities; and why is the current investigation required unless it is not intended by the Prime Minister to be a whitewash?

Hon DAMIEN O'CONNOR: I can acknowledge that work has been under way to change the culture at Rimutaka Prison for well over a year. Further investigations are currently under way to identify any people who may not have abided by procedures, current practice, or the law, at Rimutaka Prison.

Gerry Brownlee: Does the Minister think that it reflects well on him that, by his own admission, there have been investigations into these matters for over a year, but it is only since the time that Simon Power has been asking questions about these matters that guards have actually been suspended or put off the job for engaging in these corrupt activities?

Hon DAMIEN O'CONNOR: My recollection is that Simon Power has been asking the same question for over 18 months. That is not why we are making progress here. We will identify any faults and any mistakes in the corrections system, and make changes and take action wherever necessary.

Overseas Investment Legislation—Conservation and Access

9. Dr ASHRAF CHOUDHARY (Labour) to the Minister for Land Information: What reports has he received on the success of the 2005 changes to the overseas investment legislation in ensuring greater access for New Zealanders and improved conservation values?

Hon DAVID PARKER (Minister for Land Information): It is a privilege for overseas investors to own sensitive New Zealand land, and the Overseas Investment Act, passed by the Labour-led Government in 2005, was updated to ensure that, as a prerequisite of the sale to overseas people, we can acquire foreshore, seabed, river, and lake bed, and secure access to them. The sale of Poronui Station near Taupō, from one overseas party to another, has been approved on terms that show that this legislation is working.

Dr Ashraf Choudhary: What has been achieved in the Poronui Station sale?

Hon DAVID PARKER: Privately owned riverbed on the station is now to come into Crown ownership. Access through the property to adjacent conservation land and to the rivers has also been secured so that New Zealanders now have rights to fish, tramp, and picnic. The terms agreed are becoming typical. Another example was last year’s sale of Carter Holt Harvey forests, where significant public access gains were made.

Metiria Turei: Does the Minister agree that there would be greater access for New Zealanders and improved conservation values if the sale of sensitive land to New Zealanders included the same mechanisms for providing, protecting, or improving walking access over that land as the Overseas Investment Act requires for land sales to overseas investors; and, if he does not agree, why not?

Hon DAVID PARKER: The walking access panel recently reported with some recommendations that will make some very good advances in terms of walking access over New Zealand land, particularly by the proper definition of marginal strips and paper roads. I think that is good progress in respect of those lands.

Hone Harawira: Kia ora, Madam Speaker. Kia ora tātou te Whare. In respect of the claims of the success of the changes to the overseas investment legislation, what response does the Minister have to the statement from Campaign Against Foreign Control of Aotearoa that foreign investment will boost house prices even more, making them far too expensive for the average New Zealander to buy, and the statement from Margaret Mutu, chairperson of Te Rūnanga o Ngāti Kahu, that by trying to sell the 9-hectare block at Rangiputa for $4 million the Government is planning to wipe its hands of all historical land claims by Ngāti Kahu for the cost of a measly 45 acres?

Hon DAVID PARKER: Although these matters do not fall directly within my responsibility, I do recall and agree with the Deputy Prime Minister’s answer last week, or the week before, when he indicated that he was not convinced that overseas purchase of residential land was having a significant effect on house prices.

Hone Harawira: Does the Minister support suggestions from a Government MP that Māori should turn their coastal lands into camping grounds or holiday parks for the enjoyment and greater access of all New Zealanders, but that other New Zealanders need not do so; and is that the Government’s solution to the problem that New Zealand camping-ground owners are cashing in on the millions to be made by selling their coastal properties to overseas buyers, and now ordinary Kiwis have nowhere to go for their holidays?

Hon DAVID PARKER: I am aware that the Minister of Conservation is advancing the creation of additional camping grounds in Department of Conservation land. In respect of the likes of this land, which until now the public has been excluded from, including riverbeds and adjacent conservation land near Poronui Station, all New Zealanders have not had rights there, but both Māori and non-Māori are gaining rights as a consequence of this new deal on Poronui Station.

Early Childhood Education—Free Hours Policy

10. KATHERINE RICH (National) to the Minister of Education: Why should community-based early childhood education centres like Royal Road Preschool implement the Government’s policy of 20 free hours when to do so means they will be worse off financially and have to close?

Hon STEVE MAHAREY (Minister of Education): Community-based centres want to introduce the 20 hours of free early childhood education policy because it agrees with their own drive to make a real difference to the education of young New Zealanders.

Katherine Rich: What does the Minister say to the parents of children at the Royal Road Preschool, who face closure of their centre if they accept his policy, when he is the Minister who stared down the barrel of a camera and said:

“If you are a parent and you are watching this, very simple, your child’s 3 to 4, you go down to your local centre, enrol, say ‘My child is here for these 20 free hours.’, that’s all you do.”? What a fraud!

Hon STEVE MAHAREY: I would say to those parents that we all know that this policy is enormously popular. The Ministry of Education will visit this particular centre to talk through its financial situation with the staff there, because we want to ensure that those children have access to the policy.

Dianne Yates: What reports has the Minister seen regarding support for 20 hours’ free early childhood education?

Hon STEVE MAHAREY: I was very pleased to hear the leader of the National Party championing the policy by saying: “We want these young kids to be able to have 20 free hours.” Mr Key may, however, like to consult the co-leader of the National Party about this change of heart, because Mr English will inform him that according to the website of the National Party it is committed to scrapping this policy, thus ensuring that no young kids have access to 20 free hours.

Hon Brian Donnelly: Can the Minister explain what principle of equity and educational choice leads to a 5-year-old child attending early childhood education being fully funded for only 20 hours per week for 1 month of the year, when that same child, if attending school, would be fully funded for his or her education for the whole year, or is this situation just a historical anomaly?

Hon STEVE MAHAREY: No, it is a financial reality. The policy is focused on 3 to 4-year-olds. Children who remain in early childhood centres for reasons such as disability will continue to be funded, but the others move on to a funded position in a school.

Katherine Rich: Is the Minister’s policy of 20 free hours really free, when documents prepared by his own officials state that shifting from a childcare subsidy to 20 free hours “could mean that some childcare subsidy clients pay more than they do now for early childhood education”, and when these clients are exactly the same families he is trying to engage in early childhood education?

Hon STEVE MAHAREY: As the member quite rightly points out, there are two funding systems in place here. One is the subsidy that works its way from Work and Income into the hands of parents, who transfer that money to an early childhood centre in return for care. The other, of course, is what we are introducing here, which is educational funding for 20 free hours at these centres. That is what the policy is.

Katherine Rich: What kind of “Mahareyism” is it to argue that 20 free hours is better because it is free, when his own officials point out that some childcare subsidy clients dealing with Work and Income will be worse off—worse off—if they have their children receive the 20 free hours rather than keep them in their present situation?

Hon STEVE MAHAREY: All I can say is that it is a bit rich for the member to rise in the Chamber and make that argument, when her policy is to scrap the entire policy.

Katherine Rich: Why does the Minister pretend he is concerned about increasing the participation of Māori and Pacific Island toddlers in early childhood education, when staff at the Royal Road Preschool—a community-based, not-for-profit centre that serves those communities every week—are saying it will have to close if it accepts the Government’s 20 free hours policy?

Hon STEVE MAHAREY: We on this side of the House do not pretend to support the advancement of Māori and Pacific Island children. That may be what people in the National Party do, but we on this side have made huge advances over the past 7 years, through our policy of early childhood education, to advance the interests of those very Māori and Pacific Island children—children the member herself would never support, because she would scrap the policy.

Crimes (Substituted Section 59) Amendment Bill—Smacking Ban

11. HEATHER ROY (Deputy Leader—ACT) to the Prime Minister: Does she stand by her statement that her Government would “absolutely rule out legislation banning smacking. That would be a very silly thing to do.”; if not, why not?

Rt Hon HELEN CLARK (Prime Minister): Yes.

Heather Roy: Why does the Prime Minister not trust her MPs to exercise their own consciences on this vote?

Rt Hon HELEN CLARK: What is on the conscience of the Government is the need to do something about the appalling rate of child death and injury from violence in the home.

Hon Dr Michael Cullen: Is one of the groups advertising against the bill a group called Focus on the Family, which was founded by Dr James Dobson, and is this the same Dr James Dobson who has likened proponents of gay marriage to the Nazis, backed political candidates who called for the execution of abortion providers, defined embryonic stem cell research as State-funded cannibalism, and urged Christian parents to pull their children out of public school systems; if so, would she rather be associated with Unicef, Save the Children, Plunket, and Barnados in supporting the bill?

Rt Hon HELEN CLARK: I most certainly would rather be associated with Plunket, Barnados, and Save the Children, which are reputable organisations that stand for decent values and for not having violence in our homes, than with the extreme right-wing fundamentalist groups that do not care about those issues.

Hon Dr Nick Smith: How can the Prime Minister justify breaking her word, given to the electorate of New Zealand prior to the last election, by maintaining that Sue Bradford’s bill does not ban smacking, when her own Labour MP Charles Chauvel stated during the debate on the short title of the bill, on 14 March, that the bill could quite properly be described as the “Making a Smack Unlawful Bill”?

Rt Hon HELEN CLARK: Firstly, it is perfectly plain that the bill does not ban smacking. It is a fact that around the world, eight countries have introduced such legislation. This bill is not such legislation.

Metiria Turei: Can the Prime Minister confirm that more than 55 well-known organisations involved in the care and welfare of children, including Presbyterian Support New Zealand, the New Zealand Paediatric Society, the Families Commission, and the National Collective of Independent Women’s Refuges, support this bill, which does not create a new offence but simply removes the defence for an existing criminal activity and gives children the same protection under the law that adults and animals have?

Rt Hon HELEN CLARK: Yes and those are the very good reasons why reputable organisations that care about our children support this bill.

Gordon Copeland: Why does the Prime Minister not support the amendment of Chester Borrows, since it allows a smack a hand to continue whilst outlawing hitting with an implement of any kind and, indeed, outlawing even a smack that causes injury beyond that which is transitory and trifling, since objectively that conforms with her stated position?

Rt Hon HELEN CLARK: It is my understanding that Sir Geoffrey Palmer, who advised the Justice and Electoral Committee on both amendments, advised that Mr Borrows’ amendment would leave New Zealand in breach of international conventions and, furthermore, was a lawyers’ charter.

Heather Roy: What right does she believe she has to override the views of the majority of New Zealanders and her own caucus and to tell me, as a mother of five, how to raise my own children?

Rt Hon HELEN CLARK: The member will never get from me anything like Jenny Shipley’s code of social responsibility, which tried to tell people precisely how to do that.

Hon Steve Maharey: To summarise this debate, can the Prime Minister confirm that the bill before the House neither bans smacking nor sets out how parents should raise their children, and that it simply removes the defence of a person who is facing prosecution in court for using excessive force to discipline children?

Rt Hon HELEN CLARK: The member’s analysis is absolutely right. I believe that if this bill passes, the police will have a reasonable chance of actually getting convictions against child beaters who take to their children with riding crops, bits of wood, and the rest of it.

Metiria Turei: I seek leave to table a list of over 50 organisations that have put their hands up in support of the Crimes (Substituted Section 59) Amendment Bill.

Leave granted.

Hon Dr Nick Smith: I seek leave of the House to table from Hansard the speech of Charles Chauvel, a Labour MP, in which he said the bill could be appropriately named the “All Use of Force to Punish a Child will be Illegal and This is Clear to Parents Bill”.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? There has been objection.

Heather Roy: I seek leave of the House to table an article from the Dominion Post of 14 June 2005, in which the Prime Minister is quoted as saying that her Government absolutely rules out legislation for banning smacking, as that would be a very silly thing to do.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Madam SPEAKER: Question No. 12. I call the Hon Tony Ryall.

Gordon Copeland: I raise a point of order, Madam Speaker. I am aware that we are leaving question 11, but the Prime Minister purported to quote from a document in the name of Sir Geoffrey Palmer in her answer to my supplementary question. I believe that in such circumstances she is bound to table that document. Could I have a ruling on that point, please?

Madam SPEAKER: The member should have raised that at the time.

Gordon Copeland: Madam Speaker, we have not started the next question yet, have we?

Madam SPEAKER: Yes, we have, actually. I have called the Hon Tony Ryall.

Gordon Copeland: I know, but I said in raising the point of order that I did not realise that. I was just momentarily a little bit late. I would ask for your forbearance and a little flexibility on the matter.

Hon Dr Michael Cullen: The Prime Minister was not quoting an official document. She was quoting Sir Geoffrey Palmer’s evidence to a select committee, which is not the same thing as that.

Madam SPEAKER: In order to clarify matters, can I ask the Prime Minister whether she was quoting from an official document.

Rt Hon HELEN CLARK: No, I was not. I was quoting from my understanding of the advice to the committee.

Madam SPEAKER: I think that clarifies the matter for the benefit of the member. Thank you.

Laboratory Services—Auckland District Health Boards

12. Hon TONY RYALL (National—Bay of Plenty) to the Minister of Health: What action, if any, did he take to investigate claims there may be conflict of interest concerns over the Greater Auckland district health boards’ consideration of changes to community laboratory services, and when did he take that action?

Hon PETE HODGSON (Minister of Health): I became aware in July last year that there might be a conflict of interest, when Dr Hutchison asked me a parliamentary question. I then sought advice—advice from the Auckland District Health Board informed the answer. That advice said that Dr Bierre had stood down from all board business 6 months prior to the issuing of the community laboratory request for a proposal. However, I now know from Justice Asher’s judgment that Dr Bierre actually stood down on 21 December 2005, effective from 14 January 2006, only shortly before the issuing of the request for a proposal. I might also note that I now also know that Dr Hutchison was aware of the conflict of interest and, indeed, promoted it 13 months before he told me about it.

Hon Tony Ryall: Who in the Auckland District Health Board misinformed the Minister, and does the Minister now regret that he did not make more active inquiries surrounding these conflicts?

Hon PETE HODGSON: The Auckland District Health Board informs the Ministry of Health generally, which drafts answers for my consideration. I have, however, today received advice from the chief executive of the Auckland District Health Board, apologising for the error back then in July 2006 and saying that the advice should have read “6 months prior to the community laboratory contract being let.”

Hon Tony Ryall: Does he agree with the Prime Minister’s description that Dr Bierre is duplicitous, and her questioning that Dr Bierre’s activities may be illegal; if he does, is this the sort of person with whom this Government is prepared to allow its appointees to do business?

Hon PETE HODGSON: Dr Bierre is a National Party member on the National Party ticket for the Auckland District Health Board. I find it interesting that in the space of 18 months—

Madam SPEAKER: I ask for order. I assume that the Minister is trying to address the question. He has a long preamble, but would members just give him the opportunity to answer so that we can all hear.

Hon PETE HODGSON: —National’s spokesperson on health can go from supporting this fellow, to wanting him run out of town. The long and short of it is that the judge has found that not only did Dr Bierre break two laws but also that the whole process of advantage has now evaporated. Therefore, I agree with the Prime Minister.

Hon Tony Ryall: Can the Minister confirm his answer he gave earlier in question time, that he would be happy for his appointees to sign a new contract with a company associated with Dr Bierre; despite Dr Bierre’s illegal use of insider information, his misleading comments, and the Prime Minister’s description of his activities as potentially illegal, is he prepared to trust multimillion-dollar laboratory contracts to a man whom his own Prime Minister, and he himself, has labelled as duplicitous?

Hon PETE HODGSON: The gentleman has broken the law, and his contract has been struck down. In the striking down of the contract, a judge of the High Court said that it is now a level playing field because of the process of the court proceedings.

Hon Tony Ryall: Can the Minister be absolutely clear that he is prepared for his appointees to enter into a contract with a man who not only has acted illegally but also has used inside information, is duplicitous—in the Minister’s own and his Prime Minister’s words—and that that is the sort of person whom the Minister is prepared to enter into a contract with through his appointees?

Hon PETE HODGSON: A quick reminder—the man whom this member of Parliament now so strongly dislikes was his buddy’s mate a year and a half ago, and his buddy went to the Auckland District Health Board and tried to extract public money from him. In fact, his buddy got Dr Bierre to write to him, so that he could go to the Auckland District Health Board. We want to be careful about who is being duplicitous around here.

Gerry Brownlee: I raise a point of order, Madam Speaker. I do hope you were listening to the answer.

Madam SPEAKER: I was trying to.

Gerry Brownlee: I appreciate that it would have been difficult. Part of the difficulty arises from the implied allegation from Mr Hodgson that because somebody in our party had a previous knowledge of or knew Dr Bierre, somehow a blind eye should be turned to his poor behaviour. That is not the case from the National Party, and never has been. That is why the questions are before the House today. It is objectionable that Mr Hodgson should want to progress along those lines. It is worse that he is not prepared to answer the simple question as to whether he will sanction public money finding its way into this man’s hands again.

Madam SPEAKER: That is not a point of order; it is a matter of debate. It was extraordinarily difficult to hear, so I have assumed that the Minister has addressed the question.

Hon Tony Ryall: I raise a point of order, Madam Speaker. I appreciate that. The fact is I did ask the Minister a very clear question, because it goes to the issue of acceptable standards in public life in contracting. Both the Prime Minister and the Minister have described Dr Bierre as duplicitous. The Prime Minister has suggested there may be illegal activity. The Minister did not answer the question as to whether he was prepared for his appointees, the people he chooses to do the business for him, to sign a contract with a man whom even the Prime Minister has called duplicitous.

Hon PETE HODGSON: Has it occurred to the member that if I were to instruct the Auckland regional health boards not to deal with Labtests, that decision would itself be subject to judicial review?


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